ELEC is going to play a big part in VoIP
SBC Gets Big Internet-Phone Pact
Ford Is Getting the Service
For 50,000 of Its Workers
As Businesses Show Interest
By ALMAR LATOUR
Staff Reporter of THE WALL STREET JOURNAL
September 21, 2004; Page B8
SBC Communications Inc. is rolling out Internet phone service to 50,000 Ford Motor Co. employees in 110 locations, marking one of the largest such deployments yet as traditional phone companies enter the Internet-calling fray.
The contract, to be announced today, shows that large businesses are increasingly interested in upgrading their telephone systems to state-of-the-art Internet calling technology, even though the Internet-calling market for businesses is still nascent.
Separately, Verizon Communications Inc. is expected today to begin rolling out a consumer software product named Iobi that will allow consumers to route phone calls, store caller ID phone numbers on contact lists and forward voice mails via e-mail by way of their PC.
The move by SBC, the nation's second-largest local phone company after Verizon, shows how it is aggressively pursuing large business customers and protecting existing enterprise accounts -- and that it is using Internet calling as a weapon to compete against rival long-distance companies that still dominate the business-telecom market.
SBC and its peers Verizon and BellSouth Corp. are trying to expand their presence in the business market because they are facing a decline of their traditional local phone business as consumers flee to cable rivals, wireless phones and Internet start-ups.
"The Bells are still in the early stages of growing in the business-telecom market," says Todd Rosenbluth, a telecom analyst with Standard & Poor's in New York. "But the business segment is becoming increasingly more important as the consumer side is facing competitive pressures."
In addition to trying to expand their business segment, large local phone companies are also trying to build up their presence in the high-speed Internet, wireless, and consumer long-distance markets. SBC and Verizon have been very successful at taking long-distance consumers from AT&T Corp. and MCI Inc.
Replicating that success with business customers will be harder. Large enterprises don't change their telecom equipment very often and many have long-standing relationships with AT&T and other traditional long-distance companies. In the past, local phone companies could only offer telecom services in their region -- a drawback for large business customers that have offices all over the U.S.
But today, Internet calling and recently constructed data networks increasingly allow local phone companies to offer services well beyond their region. And the companies can pitch Internet services as a cheaper alternative.
For the Ford project, SBC will design, build and manage the Internet phone system for the car maker's headquarters in Michigan. The project, which is valued at an estimated $100 million, is likely to be completed in the next three years.
Internet calling is expected to deliver savings on communication costs for Ford, in part because the technology will allow Ford to run data, voice and video over a single network. More-traditional communications technologies require data and voice to run over separate networks.
SBC will use Cisco Systems Inc. equipment to build the network, including 50,000 Cisco phones. SBC engineers will also run the network's day-to-day operations.
In addition, SBC will deliver long-distance data and voice services to Ford's headquarters. SBC executives say that the company has dozens of similar Internet calling and long-distance projects in the works, though not all as sizable as the one with Ford.
A Ford spokeswoman confirmed that a contract with SBC had been signed but declined to comment on details.
Write to Almar Latour at almar.latour@wsj.com1 |
